You won't find a better media center than the open-source XBMC, but most people don't have the space or desire to plug a noisy PC into their TV. Instead, I converted a cheap nettop into a standalone XBMC set-top box. Here's how.

In the spirit of our Winter Upgrades theme this week, this guide details how to turn a cheapo nettop (think netbook for the desktop) into a killer settop box running XBMC. It handles virtually any video file I throw at it with ease (including streaming Blu-Ray rips from my desktop), it looks tiny next to my Xbox 360, it's low energy, and it's whisper quiet.

Huge props to this guide on the XBMC forums, which served as the starting point for much of what I did below.

What You'll Need

Acer AspireRevo: This $200 nettop ships with 1GB of RAM, an Intel Atom 230 processor, 160GB hard drive, Windows XP (which we won't use anyway), and an integrated graphics chip that handles HD video and can output it to HDMI. It also comes with a small wired keyboard and mouse, but once you're done here, you shouldn't need either of them. Oh, and it's tiny. (Other, more powerful nettops will work [like this one's beefier, $330 older sibling], but this is the cheapest one I could find with the NVIDIA ION graphics powerful enough to handle the HD playback.)

XBMC Live: This is a Live CD version of XBMC that boots directly into XBMC and has a tiny footprint. Basically all you're running is XBMC, so your media center stays light and snappy. You can find the download specifically set up for these NVIDIA ION machines on this page, you can grab the direct download here, or download via BitTorrent here. UPDATE: The latest versions of XBMC Live should support the ION machines by default, so you should be able to go straight to the regular download page and use the XBMC Live download offered there.

A thumb drive: It doesn't have to be huge, but it'll need to be at least 1500MB of capacity, according to the installer. You should also format it to FAT32.

An IR receiver/Windows Media Center remote: This isn't strictly necessary, but if you want to control your shiny new XBMC via remote control, you'll need some sort of supported remote with a USB receiver. I bought this $20 remote because it was the cheapest I could find. (Incidentally, it also works like a charm with XBMC as soon as you plug it in.)

Getting XBMC Live up and running on your nettop is a breeze if you follow a few simple steps, so let's get started.

Install XBMC Live on Your Thumb Drive

XBMC Live allows you to try XBMC on any computer from a bootable CD or thumb drive, then optionally install the lightweight, XBMC-focused Linux distro directly to your device if you like. Since our nettop doesn't have a DVD drive, we'll need to first install XBMC to our thumb drive.

(There are ways around this. If you had a USB optical drive, you could probably burn XBMC Live to a disc and go from there. The thumb drive method isn't much more difficult, though.)

Here's how it works:

1. Download the XBMC Live installer by clicking on the Live link on this page.

UPDATE: If you've got access to a Windows or Linux machine, I'd recommend using UNetbootin to install the XBMC Live installer straight to your thumb drive. If you take that route, you can skip the next two steps. Just download UNetbootin, run it, set Ubuntu as your operating system and 10.x Live as your distribution. Assuming your thumb drive is plugged in and freshly formatted, choose your thumb drive as the drive you want to install to and let UNetbootin work its magic. When it's done, you'll have a thumb drive running XBMC Live and ready to install to your Aspire Revo.

2. Burn XBMC Live to a CD

Once the download completes, unzip the xbmc.zip file. What you're left with is an xbmc.iso file—the disc image of the XBMC Live installer. Now you need to burn this ISO to a CD. Install our favorite tool for the job, ImgBurn, then right-click the xbmc.iso file and select Burn using ImgBurn. (If you're running Windows 7, you can use its built-in ISO burner, too, by selecting Burn disc image.)

3. Install XBMC Live to Your Thumb Drive
Now that you've burned XBMC to a CD, you're ready to install it to your thumb drive. To do so, plug in your thumb drive, put the XBMC Live CD in your DVD drive, and reboot your computer. If it's not already your default setting, go into your system BIOS (for most computers hitting Delete at the first boot screen will launch your BIOS) and set your optical drive as the primary boot device.

(All this means is that when your computer boots, it'll first check to see if there's any bootable media in your optical drive. If not, it'll continue booting to your secondary device—generally your hard drive. If your optical drive does contain bootable media—like your XBMC Live CD, for example—it'll boot it up.)

When XBMC Live loads, select "Install XBMCLive to disk (USB or HDD)", then accept the first prompt (by pressing any key). Next you'll end up at the "Choose disk to use" prompt, where you'll tell the installer that you want to install to your USB stick. Be careful here not to choose your hard drive, because it would be happy to overwrite your operating system if you told it to. Remember, your thumb drive is the Removable disk. After you pick the disk you want to use, confirm that you want to proceed and let the installer do its magic. (It'll only take a few minutes.)

Eventually the installer will ask you if you want to create a permanent system storage file, which presumably you'd want if you're not sure whether or not you want to install XBMC Live to your Acer's hard drive. I went ahead and created the system storage (even though we'll install XBMC Live directly to the hard drive in the next step.) Once the installation finishes, you're ready to proceed to the next step.

Set Your System BIOS

You'll need to make a couple of tweaks to your system BIOS to get it working smoothly with XBMC Live. So plug in your thumb drive, boot up your Acer AspireRevo, and hit Delete at the first boot screen to edit your BIOS. Look for the "Boot to RevoBoot" entry in the Advanced BIOS features menu and disable it. While you're there, set your XBMC Live thumb drive as the primary boot device. (You can set the primary boot device back to your hard drive later, after you've installed XBMC Live to your drive.)

Then go to the Advanced Chipset Features menu and set the iGPU Frame Buffer Detect to Manual and set the iGPU Frame Buffer Size to 256MB. (This is detailed here; the actual guide says 512, but that requires that you install more RAM—something I may do in the future, and will detail with a guide if I do. The 512 buffer size will help you stream the larger HD videos without hiccups.)

Now that your BIOS are set, you're ready to try out XBMC Live on your Acer AspireRevo.

Boot Up/Install XBMC Live to Your Hard Drive

At this point, you've got two choices. You can either restart your Acer AspireRevo and boot into XBMC Live to play around a little before you install it to your disk. If you're sure you're ready to install it for reals, just go ahead and run through the exact same installation as you did above, only this time install it to your nettop's hard drive. When you install to the hard drive, you'll also set a system password. This'll come in handy later.

The Final Tweaks

Okay, so far so good. XBMC should boot up directly from your hard drive now, and if you've plugged in your Windows Media Center remote, it should also be working without a hitch. You've just got to make a couple of adjustments to make it shine.

Now, what makes your little nettop work so well is that its onboard graphics processor can handle all the HD business without eating up your regular processor power, so you'll want to enable this in the XBMC settings. So head to Settings > Video > Play, find the Set Render to section, and set it to VDPAU.

Now, depending on how you're planning on hooking up your XBMC Live box to your television, you've got a few more tweaks you'll want to make. Namely this:

If you want to use HDMI for your audio out, head to Settings > System > Audio hardware, then set the audio output to Digital. Set your Audio output device to hdmi, and set the Passthrough output device to hdmi. Last, enable Downmix multichannel audio to stereo.

If you are using HDMI as your audio out (I am, and it's pretty nice), you've got to make one final tweak if you want the audio output to work with menu sounds. (It'll work fine with video without making this tweak, but the click-click sounds that play when you move around the XBMC menu are nice to have.) If that applies to you, create a new text file on your regular old computer (name it asoundrc.txt) and paste the following code (again, this awesome tweak comes from this post):

pcm.!default {
type plug
slave {
pcm "hdmi"
}
}

In the next step, I'll show you how to copy that file over to your nettop (a little trick that'll also come in handy for manually installing plug-ins and copying files to your nettop).

SFTP to Your XBMC Box

If you want to transfer files to your XBMC Live box from another computer, you'll need to get yourself an FTP client (I like FileZilla) and log into your nettop with the password you set when you were installing XBMC Live. To do so, create a new connection in Filezilla that looks something like the screenshot below (the default user is xbmc).

Once you're connected, make sure you're in the /home/xbmc/ directory, then copy over the asoundrc.txt file we made above. (The one you want to use if you're running your audio through the HDMI output.) Once it's copied over, rename the file to .asoundrc, restart XBMC, and the click-click menu sounds should be working along with regular old A/V playback.

The same SFTPing method here will be useful if you ever want to manually install any plug-ins or skins down the road, or just copy over media directly to your nettop's hard drive. (Though we'd recommend streaming—see below.)

Other Options

As I said above, you can buy more expensive, meatier machines, but for my money this Acer nettop has worked perfectly. Apart from upgrading to better equipment, you can also add up to 2GB more RAM if you're up for the job (RAM's so cheap these days, anyway). Like I said, though, so far I haven't seen the need for it.

I also quickly switched the skin to the MediaStream skin, which is the one you see in the photo at the top of the page. For a look at some other great skins you may want to apply to your XBMC box, check out these five beautiful skins—or just head to XBMC's main skins page.

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Now that you've got it all set up, you've probably also realized that 160GB isn't all that much space for your media. You'd be right, of course. You've got two pretty good options. First, the nettop should have something like four free USB ports still, so you can easily plug in a big old drive that way. Assuming, however, that you can run an Ethernet wire over to your nettop, your best option is just to connect it to a shared folder on your home network. XBMC works like a charm with Samba shares (Windows shared folders use this).

Whichever method you use, you just need to add your extra hard drive space as a source in XBMC. You can do so through any of the individual menu items (videos, for example), or you can add a default Samba username and password in the settings so it can connect automatically without asking for a password each time you add a new watch folder on that machine.

At this point I could go into more detail on how to use and get the most out of XBMC (it can be a little hard to get your head around at first, even though once you do, it's not actually confusing). We've covered souping up your XBMC—and building your classic Xbox XBMC machine—and both offer some help in those directions. But stick around; tomorrow we'll follow up with an updated guide to some of our favorite XBMC tweaks.

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This guide covers in pretty close detail one method for putting together a dedicated, quiet XBMC media center without breaking the bank, but it's certainly not your only option. If you've gone down this road before, offer your tips and suggestions in the comments. For my part: I'm completely in love with my new little media center.

Adam Pash is the editor of Lifehacker and loves a good computer-based DIY, especially when the results are as beautiful as XBMC. His special feature Hack Attack appears on Lifehacker. Subscribe to the Hack Attack RSS feed to get new installments in your newsreader, or follow @adampash on Twitter.